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“AN ADDITIONAL TOOL FOR TRYING TO REFORM CRIMINAL BEHAVIOR” mentioning the U.S. Dept of Labor was published in the Extensions of Remarks section on pages E1317 on July 18, 1996.
The publication is reproduced in full below:
AN ADDITIONAL TOOL FOR TRYING TO REFORM CRIMINAL BEHAVIOR
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HON. WILLIAM M. THOMAS
of california
in the house of representatives
Thursday, July 18, 1996
Mr. THOMAS. Mr. Speaker, recent communications between the Department of Labor and California show we have another problem to correct in restoring power to the States. Bluntly, the Department is saying California has to pay unemployment benefits to certain criminals being released from prison.
Current Federal law requires employers to pay Federal employment
[FUTA] taxes on work performed by their employees. This includes prison inmates who work for private companies through innovative work programs established in several States, including California. Today, some 200 people in California prisons are employed in jobs provided under agreements between the State and private businesses. However, FUTA taxes do not have to be paid for work by prisoners employed in prison operations such as the laundry or cabinet shop.
Since FUTA taxes are paid on behalf of some prisoners, the U.S. Department of Labor ruled that these prisoners must be paid unemployment benefits upon their release from their job--essentially, when they are released from prison. Failure to comply is serious: California employers, for example, would lose tax credits worth $1.7 billion for FUTA taxes they pay on other workers if the California program is disqualified.
Why does Labor take this position? The Federal unemployment insurance program only permits denial of employment benefits in three cases: if the worker's income exceeds certain limits; the claim is fraudulent; or the employee was fired for misconduct. Since prisoners lose their jobs when paroled or released from prison, they do not fit the exceptions.
California voters established the Joint Venture Program in 1990, creating a private work program for prison inmates. Criminals' wages are used to compensate victims, offset incarceration costs, and set-
aside funds--20 percent--for the inmate's support upon his or her release from prison. In 1996, California voters overwhelmingly passed an initiative (Proposition 194) that denies unemployment benefits to criminals participating in the Joint Venture Program.
The Department of Labor decision would force California either to pay out unemployment benefits to released prisoners or to eliminate a program that has been successful in helping criminals transition back into the work force. Allowing employees to lose $1.7 billion in credits for taxes they pay on the services of ordinary working people is not an option, needless to say.
Legislation I am introducing today would change the law to treat all prison inmates who participate in work programs the same: Their services would be exempt from the FUTA tax. This would effectively deny unemployment benefits to released prisoners and prohibit the Department of Labor from placing such a ridiculous requirement on the States. The bill's enactment would give States an additional tool to use in trying to reform criminal behavior and I hope my colleagues will agree to its adoption in the near future.
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